The economy is a very sensitive organism and it is best balanced and maintained by the RBI governors of India. The financial status is checked by the governor of the RBI. It is a pretty big burden for all governors to stabilize the financial condition. The task for a succeeding governor may often turn to be a herculean task if the previous governor messed up with the economical condition. Coming from a strong background of economics, they need to put their best step forward to match up to the expectations.
So what are the tasks involved for an RBI Governor ?
- Stability Maintenance
This is the prime objective of the working governor. Being the head of the iconic bank, the governor must ensure to balance the economic condition of the country.
- License for the New Banks
Well, the license to open both private and foreign banks must be granted by none other than the head of the RBI. So he must have to look deep the pros and cons for setting up of each bank.
- Interest Rates Maintenance
The most important of all – the interest rates, is also maintained by the governor. The governor is in charge of controlling the rates of deposit and other savings account.
- Monetary Control
Without the permission of the governor, not a single penny can be transferred to other places. The governor sets all the parameters upon which the financial system works. All these are properly maintained by the governor.
- Regulation Of Foreign Exchange
The governor decides the rates based upon which the foreign trades will take place with other countries. Along with the important discussions, the payment decision is the final the way governor decides.
- Rules Review
The governor has to review the rules and maintain the policies to make them more public-friendly. The main task is to ensure that the common mass do not face any problem.
- Monitoring The Flow Of Credit
The governor has the duty to look into the credit flow into the various sectors like the rural, agricultural industries. He sets the policies and terms which the small scale industries will have to agree. All the banks like rural and other banks are also monitored by the governor.
Who Is The Successful One Till Date
There have been numerous governors of RBI ever since its inception. Everyone tried to pull out the aces up their sleeves in order to restore the financial condition of the country. The name which stands out among the RBI head is none other than Dr. D. Subbarao whose tenure was for two terms, from 6 September 2008 to 3 September 2013. For stimulating the growth, he had cut down the repo rates from 9% to 5% in his early seven months at the helm.
The policy for fiscal consolidation by tapering the monetary position and spending cuts is highly noteworthy. He advised the government to keep a sharp watch on the foreign banks and their policies. The most remarkable achievement in his tenure is that he kept the lending rates higher and which helped to check the inflation and also maintain the rupee depreciation. This in turn helped to improve the economy of the country.
When talking about the challenges for the twenty-fourth governor of RBI, Dr. Urjit Patel, it should also be kept in mind that his moorings are as monetarist as his predecessor Rajan’s were, and he is considered to attach the same importance to inflation control as did Rajan.